Winding-up petition maintainable through constituted attorney, and admitted unpaid debt showed inability to pay despite claimed profits.

A broadly worded power of attorney authorising a representative to file and contest cases in Indian courts was sufficient to institute a winding-up petition, because such proceedings are a legal remedy connected with debt recovery and not confined to ordinary civil suits. On the merits, repeated admissions of liability, requests for instalments, and assertions of financial crunch showed inability to pay admitted debts; reported profits did not displace that conclusion where the debt remained unpaid after notice. The winding-up jurisdiction was therefore properly invoked, and the company was liable to be wound up.

---

---

Issues: (i) Whether the petition for winding up was maintainable when instituted through a constituted attorney; (ii) Whether the respondent-company was liable to be wound up for inability to pay admitted debts notwithstanding its asserted profits.

Issue (i): Whether the petition for winding up was maintainable when instituted through a constituted attorney.

Analysis: The power of attorney authorized the agent to file and fight cases on behalf of the petitioner in Indian courts. The Court held that this authority was broad enough to include institution of a winding-up petition, since proceedings for winding up are a legal remedy connected with recovery of debts and are not confined to ordinary civil suits. A narrow construction of the authority was rejected.

Conclusion: The petition was maintainable and the objection based on want of authority failed.

Issue (ii): Whether the respondent-company was liable to be wound up for inability to pay admitted debts notwithstanding its asserted profits.

Analysis: The respondent repeatedly admitted the debt and expressed inability to clear it, including by seeking payment in instalments and citing financial crunch. Under the statutory scheme, failure to pay a debt after notice raises the presumption of inability to pay. The Court held that reported profits or a seemingly healthy balance sheet do not by themselves answer a winding-up petition where the admitted liability remains unpaid and the company is unable to satisfy the creditor.

Conclusion: The respondent-company was unable to pay its debts and was liable to be wound up.

Final Conclusion: The winding-up jurisdiction was found to be properly invoked, and the company was directed to be wound up on the ground of inability to pay admitted debts.

Ratio Decidendi: Where a company admits its debt yet fails to pay after statutory notice, and its own communications show financial inability, a winding-up petition is maintainable even if the company asserts profits; a broadly worded authority to file and fight cases in court is sufficient to include such a petition.

---